Is the glass half full or half empty. It depends on the perspective from which one is looking. Krugman reflects the popular perception that workers, that is, most of the economic participants, are being left out, while Sachs cherrypicks the numbers and finds that all is getting better under austerity.
However, Sachs agrees that "better" is not good enough.
The GuardianHowever, Sachs agrees that "better" is not good enough.
To be clear, I believe that we do need more government spending as a share of GDP for education, infrastructure, low-carbon energy, research and development and benefits for low-income families. But we should pay for this through higher taxes on high incomes and high net worth, a carbon tax, and future tolls collected on new infrastructure. We need the liberal conscience, but without the chronic budget deficits.
There is nothing progressive about large budget deficits and a rising debt-to-GDP ratio. After all, large deficits have no reliable effect on reducing unemployment, and deficit reduction can be consistent with falling unemployment.
Paul Krugman has got it wrong on austerity
Jeffrey Sachs
Why Yes, I Do Believe Jeffrey Sachs Has Lost His Mind. Why Do You Ask?
Brad Delong
It seems to me that the fundamental question is whether it is progressive to accommodate saving desire in an economic environment based chiefly on rent-seeking and rent-extraction.
